Easy Questions  
Free Legal Documents

Guide to Incorporating your Business in Adna, WA

Guide to Incorporating your Business in Adna, WA

The great corporations of this country were not founded by ordinary people. They were founded by people with extraordinary intelligence, ambition, and aggressiveness.
- Daniel Patrick Moynihan

What is a Corporation?
A corporation refers to a group of people authorized to operate as a single entity. It is managed by a board of directors who administer its general affairs. Corporations are capable of owning a property and do business. It can also open a bank account under its own name.

Forming a Corporation

For a corporation to exist, "Articles of Incorporation" are filed with the Secretary of State. In some states, this document is known as "Certificate of Incorporation" or "Certificate of Formation."

Different Types of Corporations

The main difference relates to the two ways an IRS allows a corporation to be taxed: "C Corporation" and "S Corporation."

C Corporation

In a "C Corporation" corporate income (1st tax) is the source of its corporate tax. Then it will distribute the profits of the corporation to its shareholders who are liable to pay taxes out of those dividends (2nd tax). This is referred as double taxation because the C Corporation is taxed on two levels.

S Corporation

A corporation that elects to be treated as a pass-through entity is referred to as an "S corporation." All corporate income is "passed-through" to the shareholders directly, who in turn list the income on their individual tax returns. An "S Corporation" is not subject to double taxation and its accounting is easier than a "C Corporation."

Benefits of Forming a Corporation

A corporation can help reduce your taxes. It can also protect your assets. It can also shield you from liability for losses of a business. Without the corporate veil, you would have to pay the debts of the businesses you owned out of your personal assets. In a corporation, however, you are shielded from this liability, so more people are willing to invest in this type of business venture. Presently, corporations have become the standard for many business entities.

Tax Advantages of Corporations Income Shifting

A "C Corporation" even with its double taxation, can still offer tax flexibility because of income shifting. You can use income shifting to take advantage of lower income brackets. For example, raising or lowering the owner's salary can shift income from the "C Corporation" to the owner giving the owner flexibility to choose the ideal tax bracket for the corporate entity and for personal taxes.

Sole Proprietorship and Partnership

Corporations have a lot of advantages and only some disadvantages over partnerships and sole proprietorships.


• Corporate shareholders are not liable for corporate debts.

• Corporations offer self-employment tax savings

• Corporations have continuous life

• Corporations make raising money easier

• Transferring the ownership interests of a corporation is easier


• Sole proprietorship and partnership cost less to establish

• Minimal formalities required for sole proprietorship and partnership

• Sole proprietorship and partnership are not accountable for unemployment insurance

Corporation vs. a Limited Liability Company

Limited liability company (LLC) combines the simplicity of a partnership and personal liability protection of a corporation with the tax benefits.

Advantages of a corporation over LLC:

• Corporation profits are not subject to Social Security and Medicare taxes

• Corporations garner greater acceptance

• Corporations can offer a greater variety of fringe benefits with fewer taxes

• Corporations lower taxes through income shifting

Advantages of LLC over a corporation:

• LLCs have fewer corporate formalities

• LLCs have no ownership restrictions

• LLCs have the ability to deduct operating losses

• LLCs have tax flexibility

Choosing a State for Incorporation

Most people want to establish business in their home state. It would be practical to check if your home state has a high corporate tax or high state fee. You can do business elsewhere if that is the case in your chosen state. Business involves more than just selling products; it requires having active presence and or occupying an office.

Procedures for Forming a Corporation in a Particular State

Most states have the same basic process for incorporating. Variations will be on state filling fees, bylaws, continuing obligations, and formation requirements.

Foreign Corporations

A Foreign corporation refers to the registration of a corporation in each state where they do business outside of their state of incorporation. This process is called foreign Qualification.

Managing the Corporation

Approving major business decisions are done by the board of directors who manages the corporation. Directors are elected by the shareholders and hold office for a limited term. Here must be at least one director in a corporation. Some of the procedures approved by the board of directors include:

• Declaration of dividends

• Setting the terms of employment of the elected officers

• Amending the articles of corporation and bylaws

• Corporate transactions involving mergers and reorganizations

Owners of a Corporation

The ultimate owners of the corporation are the shareholders or stockholders. They don't have the right to direct the daily activities of the corporation yet they have the right to share the profits of the corporation, elect directors, and vote on major corporate actions.

In order to elect directors, a corporation is required to hold annual shareholders' meeting. If not all shareholders are present, the meeting can still go on through a conference call or by letting shareholders signed the approved actions as discussed during the meeting.

Corporate Stock

Corporate stocks have two levels, the common stock and the preferred stock. Common stock is the most basic level of stock and it is the ownerships' share in a corporation accompanied by the rights to vote on corporate policy and management. It is the usually the only kind of stock with the voting rights.

Shareholders and Directors for a Corporation

To run the company, a corporation should have at least one director and one shareholder.

Appointing Corporate Officers

Corporations have at least three officers: a president, a treasurer or financial officer and a secretary. These officers are appointed by the board of directors to run the day-to-day operations of the corporation. They don't have to be shareholders or directors; in most cases the same person can hold all offices.

Required Officers for a Corporation

A corporation must have a president, secretary and treasurer in most states. In most cases, one person can hold all three offices.

How Corporations are Taxed

A corporation, being a separate legal entity, submits their tax return each year with the IRS. If the corporations' fiscal year ends in December 31, tax returns are due on Mach 15. Tax return must be filed even if it does not have a tax due or income. C corporations file their tax returns using the Form 1120 or 1120A. S corporation are not required to pay federal taxes at corporate level but they still must prepared a separate tax return using Form 1120S.
Personalize & Print a Free WA Last Will Download this Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Personalize & Print a Free WA Living Will Download this Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Related Legal Services near Adna, WA
Crittenden William J Atty
300 E Pine St
Seattle, WA 98122
(206) 628-9500
Groff Murphy Trachtenberg
300 E Pine St
Seattle, WA 98122
(206) 628-9500
Litigation & Tort Attorneys, Attorneys
Dubester Judith
710 33rd Ave
Seattle, WA 98122
(206) 324-9457
Donnelly Kevin P
2014 E Madison St Ste 100
Seattle, WA 98122
(206) 341-9398
Criminal Law Attorneys, Attorneys, General Practice Attorneys
Donovan Thomas W
4818 Slayden Rd NE
Tacoma, WA 98422
(253) 988-8873
Erin Fairley, Attorney
121 Lakeside Ave S, Suite 108
Seattle, WA 98122
(206) 535-7929
Elder Law Attorneys, Probate Law Attorneys, Estate Planning Attorneys
Lindquist Law, P
1708 Bellevue Ave
Seattle, WA 98122
(206) 709-7700
Personal Injury Law Attorneys, Attorneys
Dibartolo Laura L
13807 S Finney St
Medical Lake, WA 99022
(509) 299-7657
Seattle Community Law Center
1820 E Pine St Ste 200981
Seattle, WA 98122
(206) 686-7252
General Practice Attorneys, Attorneys
L. M. Jones, LLC - LaDonna Jones
520 E Denny Way
Seattle, WA 98122
(206) 725-6940
Litigation & Tort Attorneys, Attorneys, Accident & Property Damage Attorneys, Personal Injury Law At
Farr Law Offices
3255 Griffin Ave
Enumclaw, WA 98022
(360) 825-6581
Wills, Trusts & Estate Planning Attorneys, Business Law Attorneys, Estate Planning, Probate, & Livin
Leen & O'Sullivan, PLLC
520 East Denny Way
Seattle, WA 98122
(206) 325-6022
Attorneys, Legal Service Plans
Hart Trip
1224 Griffin Ave
Enumclaw, WA 98022
(360) 825-5581
General Practice Attorneys, Attorneys
Cone Gilreath
105 E 1st St # 1
Cle Elum, WA 98922
(509) 674-5501
Attorneys, General Practice Attorneys, Legal Service Plans
Ellis Darrel R
105 E 1st St # 1
Cle Elum, WA 98922
(509) 674-5501
Attorneys, Legal Service Plans
Advocates Law Group, P
121 Lakeside Ave
Seattle, WA 98122
(206) 353-4625
Attorneys, Probate Law Attorneys, Wills, Trusts & Estate Planning Attorneys, Legal Service Plans, Es
Squire Park Business Law Ofc
907 14th Ave
Seattle, WA 98122
(206) 818-4473
Gearheard Law Office
1206 Wells St
Enumclaw, WA 98022
(360) 284-4359
Personal Injury Law Attorneys, Civil Litigation & Trial Law Attorneys, Attorneys
Bankruptcy Attorney For Seattle Area
530 E. Denny Way
East Union, WA 98122
(206) 504-3760
Bankruptcy Law Attorneys, Attorneys
Holland Dale J
1837 Cole St # B
Enumclaw, WA 98022
(360) 825-3757
Attorneys, General Practice Attorneys
Peel & Brimley
2014 E Madison St Ste 100
Seattle, WA 98122
(206) 770-3339
Attorneys,  Legal Service Plans,  Business Law Attorneys,  Arbitration Services,  Real Estate Attorn
Brock Carpenter & Mc Guire
529 Morgan St
Davenport, WA 99122
(509) 725-3101
General Practice Attorneys, Attorneys, Legal Service Plans
Stenberg Ann
6109 21st Ave NE
Tacoma, WA 98422
(253) 952-2912
Attorneys, General Practice Attorneys
Schuchman Lisa E
520 E Denny Way
Seattle, WA 98122
(206) 325-2801
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US